Police spokeswoman Luba Samri said the Palestinian attacker had taken a gun from one of the wounded men and opened fire at police and tourists.

On Sunday morning, a Palestinian man was shot dead by police after he stabbed an Israeli teenager in the Bab Al-Amoud area of Jerusalem.

Jerusalem police say that after the stabbings, the terrorist used the gun he obtained at the scene to shoot at police officers, who in turn killed Halabi.

“This operation was in response to the crimes of the Zionists”, the Palestinian militant group said in a statement.

The army said the woman was transferred to a hospital in Israel after the incident.

Yisrael Beytenu chairman MK Avigdor Liberman wrote on Facebook: “This is what losing control and deterrence looks like”.

The Islamist movement Hamas for its part hailed those behind the attack.

Israel has applied sweeping restrictions on entries into al-Aqsa Mosque compound since August 26.

On Monday, the U.S. State Department called on all sides to “refrain from provocative actions and rhetoric”. “The killing of an Israeli couple has left four young children orphaned and, once again, civilians have been targeted so as to cause bad suffering and to try to undermine any possibility of a political solution to the Israeli-Palestinian conflict”.

The festivities included the launching of fireworks and the waving of flags in the streets, Ofir Gendelman, a spokesperson for Israeli Prime Minister Benjamin Netanyahu said.

A suspected Palestinian gunman shot dead an Israeli couple in a drive-by shooting attack on their vehicle on Thursday night.

The two men have been identified as Aharon Bennett, 21, from Beitar Illit and Nehamia Lavi, 41, a rabbi and member of Ateret Cohanim, an Israeli Jewish settlement organisation that works for the creation of a Jewish majority inside the Old City and East Jerusalem by occupying houses.

Unidentified assailants shot Eitam and Naama Henkin to death as they drove along a road frequented by Israeli settlers near the northern West Bankcity of Nablus. “The investigation continued, and a media ban is in place on all other details of the investigation”, it added.

Israeli security forces and emergency services stand next to the body of a Palestinian who carried o …

Palestinian protestors have clashed with Israeli police at the hilltop compound in recent weeks, with unrest spilling into the Arab neighbourhoods of east Jerusalem and the West Bank.

The army said forces were scouring the area, near the Palestinian village of Beit Furik, located five miles southeast of Nablus, for the attacker.